Debunking a persistent myth: is online shopping truly the death knell of retail stores?


by Anh H. Nguyen


The Greek philosopher Heraclitus who lived 535BC-475BC had a famous saying: "The only constant in life is change." Every branch of knowledge could testify to that: for a biologist, for example, a seemingly static sample could host a buzz of activities and transfer of chemicals invisible to the naked eyes. We humans may have possession of free will at first glance, but in reality, we are constantly subject to changes, both internal and external: changes in our hormone levels, changes in our moods, changes in the weather, changes in our family and colleagues and friends, changes in the economy and politics. We are also the most active agents of change in the history of Earth, for better or worse: no other species has made such numerous, enduring, and powerful reforms to their surroundings as Homo sapiens.


The battle of e-commerce vs. physical stores: is there a clear winner?


Everything comes with a price, though. Many everyday things have been rendered obsolete by their more modern counterparts which may or may not suffer the same fate in the future. For the last decade, once newfangled inventions like floppy disks, dial-up Internet, and movie rental stores have been gradually getting phased out of existence. On the other hand, paper books, handheld cameras, and concerts are not disappearing any time soon despite the popularity of e-books, smartphones, and streaming services. So I guess the multibillion dollar question is: which camp do physical stores belong to?



For now, all signs seem to point to the latter. It is easy to get carried away by the growth of e-commerce, feel disheartened by the struggles of malls, and think retail stores' days are numbered. But in reality, people are not abandoning traditional shopping just yet. Consider these facts:


-In the UK, 80% to 85% of consumers prefer physical stores to online shopping, depending on the research.


-As of 2019, e-commerce accounted for only 19% of sales across Asia-Pacific. In the rest of the world, it was just 14%.


-99% of customers surveyed in the US have shopped in a physical stores in 2019.


Of course, statistics are never able to paint a complete picture. To deny the many shortcomings of traditional stores as well as the potential of e-commerce would be foolish. It is what it is, though: as long as people shop, a not-insignificant portion of them will shop in person. While online shopping may win in terms of stellar growth, offline stores as a whole endure. In all likelihood, they are never going out of style.


Why physical stores are here to stay


One thing is certain: the relative solid position that physical stores still enjoy is not entirely due to their merits. Many of them are poorly managed, outdated, and falling behind in efficiency. In spite of that, most consumers still prefer traditional retail, perhaps because they do not have any better alternatives. When retail experts delve into the reasons people still go out to shop, one clear pattern emerges: the relationship between customers and their shopping is a peculiar one. Shopping habits are hard to break, since they are deep-rooted in the humans' innate desires to have sensory experiences, to engage socially, and to be instantly gratified.


Here is a breakdown of what causes customers to favor in-store shopping over online:


1. Customers want to experience the products first hand, or sometimes just to browse



The ads say the sweater is made of Angora rabbit wool and therefore extremely soft. But just exactly how soft? How is the fit? Which colors look best on you? The reviews say the fragrance's top notes are bergamot, lemon, and ylang-ylang, but how does it smell on your wrist? Your friends say the peach danish from that bakery is a must-try, but you want to check out what other pastries they have in store first. And other readers rave about that new sci-fi book, but you also want to wander around the bookstore, look at the bestsellers, and settle in a corner to read.


We humans are gifted with five senses, and we love using them to explore the surroundings. Shopping online is easy, convenient, and quick, but going to the stores is a wonderful way to experience all the bounties our world has to offer. Case in point: every Christmas season, most if not all shopping locations are decked out with the mesmerizing scents, sights, and sounds of festivities. And just like clockwork, people eat it up. Shopping, even window shopping, makes people happy, sometimes deliriously so. They do not call it retail therapy for no reason! And whenever any amount of money is involved, significant or not, usually customers find it prudent to test the products before biting the bullet. While it may take more time, customers are more confident in the decision they make, which lessons the possibility of buyer's remorse, return, and exchange.


2. Customers want to interact with other customers and the staff



If the Covid-19 has taught us anything, it is that we are social animals and not meant to be cooped up in our homes indefinitely. That is also why solitary confinement is one of the cruelest kinds of punishment - people naturally seek out companion and will go berserk if left alone for too long. Going shopping in a retail stores is an interesting activity, since it combines both private and public elements - you are both in your own world, minding your business, and being part of society, watching people.


Shopping is about getting things done, but they are also about having fun and releasing stress. So while online shopping may win some of the time, ultimately, people will always go to the stores to mingle with others. And having the sales staff on hand to consult, assist, or just bounce ideas off each other is a priceless feature that online shopping with all its chatbots may not replicate anytime soon. Helpful, welcoming, and pleasant sales associates could make the shopping process a positive, even enjoyable experience for customers, who will go out of their way, literally, to shop in-store.


3. Customers want immediate results




Online merchants have worked tirelessly to optimize the shipping time and cost, but sometimes, "right now" is the only acceptable option. The ability to find the exact item they look for then buy it on the spot is why many customers turn to traditional retailers in their time of need. And sometimes, customers just want to discover new things. If something strikes their fancy and they could take it home straight away, that is a nice bonus.


In many cases, this is directly related to the presence of the sales staff mentioned above. When customers are in a hurry, the support of store personnel might be invaluable, since they could help them quickly locate their desired product, customize it if necessary, and expedite the payment.


Does that settle it?


The answer to whether e-commerce or traditional retail is winning is "neither". In all likelihood, everyone of us has done both at different times and for different purposes. E-commerce and traditional retail could co-exist in harmony; the prominence of one does not necessarily mean the demise of others.


So, the good news is that traditional retailers need not look at the success of online shopping and fret, since it occupies another space entirely, both literally and figuratively. The not-so-good news? It is not online merchants that they need to be wary of, it is other retailers that are doing a better job than themselves. What they should do is take a hard look at their processes and judge how they line up with customers' expectations, which are...


-Customers do not like to spend idle time waiting in line. According to this survey, 60% list having to queue to pay as a frustration.


-In the same survey, 47% hate looking for something, only to find it out of stock.


-43% want a mellow store atmosphere, not too busy or hectic.


-84% prefer it when a store plays music.


-33% consider it a major turn-off when the staff is unable to help them.


-55% of customers also like to take advantage of sales/coupons in physical stores.


-68% say the in-store experience is a critical part of their choice. 50% even say they would rather spend more to get personalized services and expert advice.


-An online or digital component in physical retail offers the best of both worlds: 94% UK shoppers like to research product information online before doing their shopping. On the flip side, 78% are "showroomers" who go in stores to see the products in person then shop online for the best price. This shows that shopping behaviors run a diverse spectrum and retailers should invest in an online channel to maximize their reach.



All those suggestions are good (and a lot to take in), but they are not even beginning to scratch the surface. What else should retailers do to stand out and set themselves up to succeed in the modern age?


Make traditional retailers great again: the AI-powered edition


The best course of action, of course, is to adapt and reinvent. Retailers need to continuously refine and optimize their processes to minimize cost, but at the same time, they also need to provide better services, upgrade their product selection, freshen up their stores, and invest in marketing, which takes money. Where is the happy medium? And how do retailers know when they reach it? What other resource could they utilize to reach their end goal?


It is pure and simple: retailers need to look for ways to make the most out of their customer data. The constant feedback loop is invaluable in helping them create better products, better services, and better processes. To make sure the loop is truly constant and complete, though, retailers cannot rely on any old-fashioned methods. Computer vision technologies, run by AI, designed for retailers, are the only solutions that could make full use of the golden stream of data that flow through businesses each and every day. Do not let it go to waste any longer, contact us at https://www.palexy.com/request-demo.













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